Franklin BSP Realty Trust (NYSE:FBRT – Get Free Report) and Apollo Commercial Real Estate Finance (NYSE:ARI – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.
Dividends
Franklin BSP Realty Trust pays an annual dividend of $1.42 per share and has a dividend yield of 13.8%. Apollo Commercial Real Estate Finance pays an annual dividend of $1.00 per share and has a dividend yield of 9.3%. Franklin BSP Realty Trust pays out 177.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Commercial Real Estate Finance pays out 112.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Profitability
This table compares Franklin BSP Realty Trust and Apollo Commercial Real Estate Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Franklin BSP Realty Trust | 38.83% | 8.86% | 1.91% |
| Apollo Commercial Real Estate Finance | 51.40% | 8.34% | 1.70% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Franklin BSP Realty Trust | 1 | 1 | 3 | 0 | 2.40 |
| Apollo Commercial Real Estate Finance | 0 | 4 | 3 | 0 | 2.43 |
Franklin BSP Realty Trust currently has a consensus price target of $14.00, suggesting a potential upside of 36.45%. Apollo Commercial Real Estate Finance has a consensus price target of $10.88, suggesting a potential upside of 1.26%. Given Franklin BSP Realty Trust’s higher probable upside, analysts clearly believe Franklin BSP Realty Trust is more favorable than Apollo Commercial Real Estate Finance.
Institutional and Insider Ownership
59.9% of Franklin BSP Realty Trust shares are held by institutional investors. Comparatively, 54.4% of Apollo Commercial Real Estate Finance shares are held by institutional investors. 0.7% of Franklin BSP Realty Trust shares are held by company insiders. Comparatively, 0.7% of Apollo Commercial Real Estate Finance shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Franklin BSP Realty Trust and Apollo Commercial Real Estate Finance”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Franklin BSP Realty Trust | $210.45 million | 3.98 | $95.88 million | $0.80 | 12.83 |
| Apollo Commercial Real Estate Finance | $303.67 million | 4.91 | -$119.64 million | $0.89 | 12.07 |
Franklin BSP Realty Trust has higher earnings, but lower revenue than Apollo Commercial Real Estate Finance. Apollo Commercial Real Estate Finance is trading at a lower price-to-earnings ratio than Franklin BSP Realty Trust, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Franklin BSP Realty Trust has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Apollo Commercial Real Estate Finance has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500.
Summary
Apollo Commercial Real Estate Finance beats Franklin BSP Realty Trust on 8 of the 15 factors compared between the two stocks.
About Franklin BSP Realty Trust
Benefit Street Partners operates as a self-managed real estate investment trust (REIT). BSP earns income from investing in a leveraged portfolio of residential mortgage pass-through securities consisting almost exclusively of adjustable-rate mortgage (ARM) securities issued and guaranteed by government-sponsored enterprises, either Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the government-sponsored enterprises (GSEs)), or by an agency of the federal government, Government National Mortgage Association (Ginnie Mae). BSP’s investment strategy focuses on managing a portfolio of residential mortgage investments consisting almost exclusively of ARM Agency Securities. As of December 31, 2012, the Company’s securities consisted of Agency Securities classified as available-for-sale and Residential mortgage securities classified as held-to-maturity.
About Apollo Commercial Real Estate Finance
Apollo Commercial Real Estate Finance, Inc. operates as a real estate investment trust (REIT) that originates, acquires, invests in, and manages commercial first mortgage loans, subordinate financings, and other commercial real estate-related debt investments in the United States, the United Kingdom, and Europe. It is qualified as a REIT under the Internal Revenue Code. As a REIT, it would not be subject to federal income taxes, if the company distributes at least 90% of its REIT taxable income to its stockholders. Apollo Commercial Real Estate Finance, Inc. was incorporated in 2009 and is based in New York, New York.
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